Apple’s services revenue grows 19%; App Store hits all-time record

Apple has announced financial results for its fiscal 2016 third quarter that ended June 25. The company posted quarterly revenue of $42.4 billion and quarterly net income of $7.8 billion, or $1.42 per diluted share.

These results compare to revenue of $49.6 billion and net income of $10.7 billion, or $1.85 per diluted share, in the year-ago quarter. Gross margin was 38% compared to 39.7% in the year-ago quarter. International sales accounted for 63 percent of the quarter’s revenue.

“We are pleased to report third quarter results that reflect stronger customer demand and business performance than we anticipated at the start of the quarter,” said CEO Tim Cook. “We had a very successful launch of iPhone SE and we’re thrilled by customers’ and developers’ response to software and services we previewed at WWDC in June.”

Apple sold 40.4 million iPhones (a 15% decrease from the year-ago period), almost 10 million iPads (a 9% increase in sales year-over-year), and 4.3 million Macs (down 11% year-over-year)

“Our Services business grew 19% year-over-year and App Store revenue was the highest ever, as our installed base continued to grow and transacting customers hit an all-time record,” said Luca Maestri, Apple’s CFO. “We returned over $13 billion to investors through share repurchases and dividends, and we have now completed almost $177 billion of our $250 billion capital return program.”

Apple is providing the following guidance for its fiscal 2016 fourth quarter:

° Revenue between $45.5 billion and $47.5 billion;

° Gross margin between 37.5% and 38%;

° Operating expenses between $6.05 billion and $6.15 billion;

° Other income/(expense) of $350 million;

° A Tax rate of 25.5%.

Apple’s board of directors has declared a cash dividend of $.57 per share of the Company’s common stock. The dividend is payable on Aug. 11, 2016, to shareholders of record as of the close of business on Aug. 8, 2016.